Van stocks and resilience – a step too far or good contingency planning?

Posted: 22nd June 2020

Recent events have demonstrated the fragility of supply chains and an over reliance on single sources of supply: locally, nationally and across the globe.  So, what does this mean when we think of material support to your engineers at the vanguard of your business, supporting customers and keeping homes safe, warm, and secure?  What was your experience of recent events and did you experience stock-outs of key products or run close to exhausting avenues of supply?

Partnerships demand mutual respect, understanding, openness and timely communications. Whether with a single supplier, multiple suppliers or through a managed solution a thorough understanding not only of priorities, vision and ethos but also areas of weakness or fragility is required.  Sharing of business continuity plans, provides reassurance and a mutual understanding of risks, assumptions, issues and dependencies. As we begin to learn to live with the extended implications of the current pandemic, it is reasonable to expect suppliers to revisit those business continuity plans based on some of the lessons identified.

Whether you run your own material support function or work in conjunction with a commercial partner, before CV-19 did you know how much stock you held in terms of days, weeks or months’ worth of supply? Equally, did you know your partners policy on resilience and contingency and understand their supply chain?  Ethical procurement demands an understanding of supply chains and employment policies of suppliers, to protect the rights of workers and minimise reputational risk. Taking this principal forward, why wouldn’t a housing provider understand a supplier’s supply chain and associated risks?  After all, good partnerships only exist where both parties understand each other’s strengths and weaknesses, don`t they?

Many suppliers of repair and maintenance material ceased working or had a significant reduction in their day to day operations during the early stages of lockdown.  In line with government advice they began to reintroduce services, albeit at a reduced/restricted level. As they continue to return to normality, deliveries of material are interrupted, and requirements not always satisfied in full. 

National shortages of PPE impacted Housing Associations’ (HAs)  ability to maintain emergency repairs and maintenance.  In addition, there were national shortfalls of plaster products and shortages of other building materials.  Further, HAs experienced increased lead times for fire doors and some components associated with gas servicing. So, in understanding your suppliers’ business continuity plans and the contractual framework in which they operate, where did your HA sit in terms of priorities?  If you did not know then and you still don’t know the answer now, your relationship with supplier(s) was and continues to be sub optimal.

Quite rightly, HAs focus on customer satisfaction and part of this strive for perfection is to deliver `first time fix`, minimising customer inconvenience in relation to completing jobs in homes.  Naturally, there are broader aspects associated with first time fix and overall customer satisfaction.  These include identifying what needs to be done, planning the job and then ensuring the home visit is carried out at the right place, on the right date and at the right time.  Accurate and timely communication between the HA customer service team and the occupant of the property is key.

Part of the first-time fix challenge falls to ensuring that van profiles have sufficient depth and breadth of material to meet the most common repair/replace scenarios.  The chart below seeks to draw out some of the key constraints and the continuous review/improvement process.

However, it should be the operational teams that ultimately `own` van profiles and whether the review process is conducted internally or in partnership with a supplier, the views of operatives are a key consideration.  Afterall, it is these people that sit at the vanguard of the HAs desire to provide safe, secure and warm places for families to live.

Accurate van stock profiles can only help to maintain and improve first-time fix rates for your organisation, given there are several factors that support this metric (right diagnosis, right place, right date, right time and of course occupant availability to name but a few).  The level of improvement is naturally dependant on what is being achieved currently.  Notwithstanding the factors and constraints shown in the diagram above, a refined and constantly reviewed van profile can support a minimum first-time fix rate of 90% (a figure most HAs have as a starting position and strive to better this target).  According to the Chartered Institute of Housing:

“What tenants want: a good repairs service is one of the most important services provided by a landlord. Not only is it the service that affects the greatest proportion of a landlords’ tenants, it is also the service that is most highly valued and relied on”

In addition, where surpluses are identified in stock levels at a very conservative 10% of a van profile, this can create the space for stock that is needed based on usage.  Alternatively, when applied to a £2k van profile, this can generate annual savings of circa £20k on a 100 strong fleet of repair and maintenance vehicles, as a minimum. So, maintaining accurate van profiles not only helps to maintain and improve first time fix and customer satisfaction, but makes better use of our operatives’ time and can provide savings in stock holdings. 

Written by Alan Pibworth, Principal Consultant at MCP2 Limited

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